What job-hopping is really costing you

Millennial leapfroggers, be warned: Switching over to a new job with a higher salary doesn’t necessarily mean more money. In fact, it could mean taking a serious pay cut in the long run.

Despite the stigma, Millennials will job-hop

Staffing firm RecruitiFi’s recent study, The Millennial Outlook Survey, found that as many as 86 percent of Millennials would quit their jobs today if it meant pursuing something else that catered to their “professional or personal passions.” That might be a higher salary, more immediate benefits, or a more appealing position.

Of those respondents, 83 percent acknowledged the general notion that employers often frown upon candidates who job-hop or hold multiple positions over a short period of time. The survey polled roughly 1,000 adult workers, between the ages of 22 and 35, across different industries in May.

Surprisingly, while 77 percent of the surveyed Millennials worked in white-collar positions, nearly half would consider switching to a blue-collar industry if the position was more personally fulfilling or valuable to them.

In defense of job-hopping

It’s worth noting that job-hopping isn’tjust a Millennial fad. The average Baby Boomer held roughly 11 jobs between the years they were aged 18 and 48,according to recent data from the Bureau of Labor Statistics.

Today, the average person will hold as many as seven job positions over the course of their lifetime, says an article in The Wall Street Journal.

Professional wanderlust may come with benefits: Fifty-five percent of RecruitiFi’s survey respondents said that after job-hopping, they didn’t see negative impact in their careers. In fact, in recent years, the practice has become less verboten in the eyes of some employers.

Job-hopping can be a good thing (just be smart about it)

Ryan Kahn, a career coach who founded staffing agency the Hired Group,isn’t against the idea of multiple job switches. He actually encourages it: “This is something people should do in their career,” he says, “because they need to diversify their work environments to find out what they love and hate.”

What’s more, changing career paths could help you develop your knowledge in a particular area–technology, for instance–while also broadening your network of professional connections.

Still, there are potential fiscal ramifications to be aware of, particularly if you’re moving into a lateral (or lower) position:

1. Retirement contributions vary

You could be losing out on tons in 401(k) or other retirement funds, depending on your employer’s investmentmatch, says Cindy Hounsell, president of the Women’s Institute for a Secure Retirement. “Millennials should know what they’re hopping away from, and what they’re hopping toward.”

For instance, some employers will match as much as 6 or 8 percent of your investment from the day you start working, while others require that you work a certain amount of time (two years, for example) to reach the contribution threshold.

If you don’t do your research, you could unwittingly exit just weeks (or even days) ahead of your employer’s match. That may result in thousands of dollars of retirement savings down the drain. A recent Fidelity study found that as much as $203 million was forfeited by employees who cashed out or rolled over their 401(k) accounts in 2013 alone.

2. You might get fewer benefits

It’s similarly important that you understand what benefits your new employer will (and won’t) offer you. You could end up paying higher premiums on life insurance, for instance, especially if you elect to purchase external policies.

If you are among the Millennials who would consider moving over to a blue-collar position, be aware of the fact that your new employer might not cover the basics, such as taking your social security. You could also end up having to register your income through a 1099, as opposed to a W-2, doubling your social security tax rate.

3. If you stick it out at the first job, you could hop to more money later

If a job opportunity with higher pay arises, you can optimize that salary increase by waiting to leave your job at the right time.

“It’s going to be hard for you to move up to a manager position if you’re currently an assistant,” Kahn explains as an example. “But if you stick around, you might move up to a coordinator position, and then you can make that jump to another company for something higher up the ladder.”

In the long run, it could be a financial benefit.

4. Did you forget to negotiate your salary?

If you’re miserable at your current job, it can be tempting to take a second offer right away. Even so, Millennials stand to make as much as $3,000 more on a job offer by negotiating, says Kahn. While that might not sound like much, the difference can become staggering over the course of one’s career.

If you’re currently in employment limbo, or even working toward entrepreneurship, it’s wise to map out the financial consequences that may come with a new job. Sure, a higher salary has its immediate rewards, but if you’re not careful, and you don’t know your company’s benefits, you may see challenging fiscal times down the road.